Paul Ryan on Social Security

Republican nominee for Vice President; U.S. Rep. (WI-1)

Voluntary privatization for younger workers

Q: You were one of the few lawmakers to stand with President Bush when he was seeking to partially privatize Social Security.

RYAN: For younger people. What we said then and what I've always agreed is let younger
Americans have a voluntary choice of making their money work faster for them within the Social Security system.

BIDEN: You saw how well that worked.

RYAN: That's not what Mitt Romney's proposing. What we're saying is no changes for anybody
55 and above. And then the kinds of the changes we're talking about for younger people like myself is don't increase the benefits for wealthy people as fast as everybody else, and slowly raise the retirement age over time.

BIDEN:
All the studies show that if we went with Social Security proposal made by Mitt Romney, if you're in your 40s now, you will get $2,600 a year less in Social Security. If you're in your 20s now, you get $4,700 a year less. It is absolutely the wrong way.

Give millions a chance to prosper in investor class

I have proposed reforms that would put an end to the raid of the Social Security Trust Fund, give millions of low-income Americans a chance to prosper in the investor class, and restore confidence in the intergenerational compact of Social Security.

I have proposed giving younger workers the voluntary option to invest over 1/3 of their payroll taxes into personal retirement accounts. These benefits will become the property of the individual, which can be passed onto their heirs. These voluntary
retirement accounts also have built-in safeguards to minimize risk--with a guaranteed minimum benefit, while still allowing for growth far above the chronically low rates of return in our current system. The real risk to individuals contributing to
Social Security comes in the form of those clinging to the status quo. If we do not place Social Security on sound financial footing now, there will be painful adjustments in the years ahead. My proposal would make Social Security permanently solvent.

Enthusiastically promoted Bush's semi-privatization scheme

In 2000, Democratic presidential candidate Al Gore pilfered Ryan's proposal to preserve Social Security trust funds in a "lock box." In 2006, Ryan turned down the offer to be Pres. Bush's new budget director. Later that year, when the Democrats retook th
House, the disheartened new minority turned the page by allowing Ryan to leapfrog over a dozen more senior Republicans and become their Budget Committee ranking member.

Despite all the accolades, Paul Ryan had functioned as little more than policy arm
candy for his party. His Social Security lock box proposal had gone nowhere in the Republican-controlled House. Instead of reducing the federal deficit, as Ryan had advocated, the Bush administration opted for sizable tax cuts. Ryan had been among the
few GOP House members to enthusiastically promote Bush's Social Security semiprivatization scheme and was chagrined to see his colleagues "hit the brakes" on the president's proposal, while Ryan described himself as "obviously a gas=pedal guy."

Current policy is raid, ration, raise taxes, & deny problem

Social Security's trust funds will be exhausted by 2036. [The current] combination of policies--raid, ration, raise taxes, and deny the problem--will mean painful benefit cuts for current seniors and huge tax increases on younger working families,
robbing them of the opportunity to save for their own retirements. And it will mean that those pledges of future health and retirement security that the government is currently making to younger families are nothing but empty promises. Unless government
acts, Social Security will remain threatened for current seniors and will not be there for younger families. It is morally unconscionable for elected leaders to cling to an unsustainable status quo with respect to America's health and retirement security
programs. Current seniors and future generations deserve better than empty promises. Current retirees deserve the benefits around which they organized their lives. Future generations deserve health and retirement security they can count on.

Only younger members in Congress support reform

On Social Security, I may have misread the electoral mandate by pushing for an issue on which there had been little bipartisan agreement in the first place. With no Democrats on board, I needed strong Republican backing to get a Social
Security bill through Congress. I didn't have it. Many younger Republicans, such as Rep. Paul Ryan (R-WI), supported reform. But few in Congress were willing to address such a contentious issue.

The collapse of Social
Security reform is one of the greatest disappointments of my presidency. Despite our efforts, the government ended up doing exactly what I had warned against: We kicked the problem down the road to the next generation. In retrospect, I'm not sure what I
could have done differently.

I made the case for reform as widely & persuasively as I could. The failure of Social Security reform shows the limits of the president's power. If Congress is determined not to act, there is only so much a president can do

Invest 1/3 of payroll tax in personal savings account

I have put forward my specific solution, called "A Roadmap for America's Future," to meet this challenge [of the economic crisis and the future of entitlements].

The problem, in a nutshell is this:
Medicare, Medicaid, and Social Security, three giant entitlements, are out of control. Expanding costs will drive our federal government and national economy to collapse.

Comprehensive model to restructure retirement accounts

Personal accounts for Social Security could be expanded over time until workers can choose to substitute them for all their Social Security retirement benefits. This could be accomplished using just the 6.2% employee share of the Social Security payroll
tax, still leaving workers with close to twice the benefits Social Security promises under current law (but which in the future it will not be able to pay).

The bill introduced in Congress by Paul Ryan serves as a comprehensive model of how to
structure such accounts. That bill maintains the current social safety net in full by including a federal guarantee that if any retiree's account cannot pay at least what Social Security would under current law, the federal government would pay the
difference. Because capital market returns are so much higher than what Social Security promises, however, it's unlikely the government would ever have to pay off this guarantee.

Road Map: invest 5.1% income into personal account

The Road Map plan for Social Security makes no changes in Social Security for current retirees or those over fifty-five years old. But Americans who are fifty-five and younger will have a choice to contribute part of their current payroll taxes into a
personal savings account they own and the government can't spend.

Initially younger workers will be allowed to invest only 2% of their first $10,000 of annual income into their personal accounts and 1% of all income above $10,000. Eventually,
(by the time my children retire), workers will be able to invest 5.1 percentage points (nearly half) of the 12.4% that they and their employers now contribute to Social Security.

The Road Map plan guarantees no worker will ever receive less from
Social Security than is now promised under the current system. There will be no risk to workers who choose to save for their own future rather than retire as dependents of the government.

Proposed bill to invest 50% of FICA in personal accounts

We will have to rethink Social Security because of our new ability to live longer. Everyone knows Social Security is going bankrupt. By 2017 Social Security will start running cash deficits. The trust funds run out in 2042.

Suppose that workers were
free to save and invest, in their own personal accounts, up to roughly 50% of what they currently pay in payroll taxes. Employers would contribute the same amount to their workers' personal accounts out of the payroll taxes they currently pay on behalf
of their employees. This plan was proposed in a bill by Rep. Paul Ryan (R-WI) and Sen. John Sununu (R-NH). Lower income workers would be allowed to invest a slightly higher percentage of what they currently pay in payroll taxes, and higher-income workers
a little less.

If a personal account pays more than the Social Security benefits it replaces, [the taxpayer] gets to keep the gain. If the account is insufficient to pay for all the benefits it replaces, the government pays the difference.

Comprehensive Retirement Security and Pension Reform Act of 2001: Vote to pass a bill that would raise the amount individuals may contribute to traditional and Roth Individual Retirement Accounts and to 401[k] plans and make pensions plans more portable

Voted YES on reducing tax payments on Social Security benefits.

Vote to pass a bill that would reduce the percentage of Social Security benefits that is taxable from 85 to 50 percent for single taxpayers with incomes over $25,000 and married couples with incomes over $32,000. The revenues that would be lost for the Medicare trust fund would be replaced by money from the general fund.

The mission of the Alliance for Retired Americans is to ensure social and economic justice and full civil rights for all citizens so that they may enjoy lives of dignity, personal and family fulfillment and security. The Alliance believes that all older and retired persons have a responsibility to strive to create a society that incorporates these goals and rights and that retirement provides them with opportunities to pursue new and expanded activities with their unions, civic organizations and their communities.

The following ratings are based on the votes the organization considered most important; the numbers reflect the percentage of time the representative voted the organization's preferred position.